Risky Housing Markets Becoming Riskier, According to PMI Mortgage Insurance Co.'s Summer Market Risk Index; Number of Markets With 50%+ Chance of Price Declines Jumps From Two to Six.

WALNUT CREEK, Calif. -- The risk of price declines has increased in 36 of the nation's 50 largest housing markets, according to the PMI US Market Risk Index, issued today. Joining Boston, MA and Long Island (Nassau-Suffolk), NY, four California markets -- San Diego, San Jose, Santa Ana, and Oakland -- crossed the 50 percent mark, raising to six the number of regions with a greater-than-50 percent chance of experiencing price declines. Nationwide, there exists a 21.3 percent probability of an overall house price decline, as measured within the next two years and across the 50 largest housing markets, up marginally from 20.2 percent last quarter.

"The latest PMI Market Risk Index numbers show that house price risk continues to be concentrated along the coasts, as it has been for some time," said Mark Milner, chief risk officer with the PMI Mortgage Insurance Co. "But what we are seeing with these numbers is that risk has increased in many non-coastal markets as well." Marco Van Akkeren, an economist with PMI Mortgage Insurance Co., explained, "We are continuing to witness record-pace home price appreciation in many markets without the necessary gains in income, home affordability and rent inflation. This is causing the current home price environment to diverge from long-term economic fundamentals, which cannot be sustained indefinitely."

The PMI US Market Risk Index is published quarterly by PMI Mortgage Insurance Co., a subsidiary of The PMI Group, Inc. (NYSE:PMI) as part of its Economic and Real Estate Trends (ERET) report. The Summer issue reports that:

--Boston, MA and Long Island (Nassau-Suffolk), NY continue to top the list with scores of 553 and 540, respectively, up from 534 and 511 last quarter.

--San Diego has jumped to third place, with a score of 528, up 61 points from last quarter's score of 467.

PMI US Market Risk Index by MSA
                                                          Risk
 MSA                                                      Index
 ---                                                      -----
 Boston-Quincy, MA                                         553
 Nassau-Suffolk, NY                                        540
 San Diego-Carlsbad-San Marcos, CA                         528
 San Jose-Sunnyvale-Santa Clara, CA                        513
 Santa Ana-Anaheim-Irvine, CA                              512
 Oakland-Fremont-Hayward, CA                               509
 Cambridge-Newton-Framingham, MA                           469
 San Francisco-San Mateo-Redwood, CA                       459
 Providence-New Bedford-Fall River, RI-MA                  432
 Riverside-San Bernardino-Ontario, CA                      422
 Los Angeles-Long Beach-Glendale, CA                       421
 Sacramento-Arden-Arcade-Roseville, CA                     419
 Edison, NJ                                                364
 New York-Wayne-White Plains, NY-NJ                        326
 Detroit-Livonia, Dearborn MI                              295
 Newark-Union, NJ-PA                                       251
 Minneapolis-St Paul-Bloomington, MN-WI                    249
 Fort Lauderdale-Pompano Beach- Deerfield Beach, FL        219
                Average                                    213
 Washington-Arlington-Alexandria, DC-MD-VA-WV              209
 Denver-Aurora, CO                                         169
 Warren-Farmington Hills-Troy, MI                          168
 Miami-Miami Beach-Kendall, FL                             166
 Tampa-St Petersburg-Clearwater, FL                        166
 Las Vegas-Paradise, NV                                    130
 Baltimore-Towson, MD                                      124
 Austin-Round Rock, TX                                     116
 Virginia Beach-Norfolk-Newport News, VA-NC                109
 Atlanta-Sandy Springs-Marietta, GA                        106
 Dallas-Plano-Irving, TX                                    99
 Portland-Vancouver-Beaverton, OR-WA                        95
 Orlando, FL                                                94
 Houston-Baytown-Sugarland, TX                              93
 Chicago-Naperville-Joliet, IL                              92
 Phoenix-Mesa-Scottsdale, AZ                                92
 St Louis, MO-IL                                            90
 Charlotte-Gastonia-Concord, NC-SC                          89
 Kansas City, MO-KS                                         89
 Fort Worth-Arlington, TX                                   80
 Philadelphia, PA                                           76
 New Orleans-Metairie-Kenner, LA                            71
 Milwaukee-Waukesha-West Allis, WI                          70
 Cleveland-Elyria-Mentor, OH                                69
 San Antonio, TX                                            68
 Columbus, OH                                               66
 Seattle-Bellevue-Everett, WA                               64
 Nashville-Davidson-Murfreesboro, TN                        64
 Cincinnati-Middletown, OH-KY-IN                            60
 Indianapolis, IN                                           59
 Memphis, TN-MS-AR                                          58
 Pittsburgh, PA                                             56

--The MSAs that experienced the biggest change since last quarter are in Southern California: Riverside-San Bernardino-Ontario, which increased 83 points to 422; and Santa Ana-Anaheim-Irvine, which increased 81 points to 512. San Francisco-San Mateo-Redwood City saw the next biggest increase, up 64 points to 459.

--In some areas house price appreciation has moved from center cities to surrounding areas, which may indicate a new trend. Riverside, CA; Providence, RI; Newark, NJ; and Edison, NJ all saw higher increases this quarter than their metropolitan centers (Los Angeles, CA; Boston, MA; and New York).

--The risk scores of some areas have dropped, including New York (which moved from 331 to 326), Detroit (379 to 295), Minneapolis-St. Paul-Bloomington, MN-WI (251 to 249), Fort Lauderdale-Pompano Beach (236-219), Denver-Aurora (208-169), and Miami (181-166).

--Seattle is the only West Coast MSA among the Risk Index's bottom ten, with a decrease from 84 last quarter to 64 this quarter.

--The five least risky areas remain Nashville-Davidson-Murfreesboro, TN; Memphis, TN-MS-AR; Cincinnati-Middletown, OH-KY-IN; and Indianapolis, IN, with Pittsburgh last on the list with a score of 56, up marginally from last quarter (55).

About The PMI Economic & Real Estate Trends (ERET) Report and US Market Risk Index

The PMI Economic and Real Estate Trends (ERET) Report containing the US Market Risk Index is published quarterly by PMI Mortgage Insurance Co., a subsidiary of The PMI Group, Inc. (NYSE:PMI). The Risk Index is a proprietary statistical model that measures geographic house-price risk by predicting the probability of a regional decline in home prices in the nation's 50 largest metropolitan statistical areas (MSAs) and metropolitan statistical area divisions (MSADs) over the next two years. The PMI US Market Risk Index is based on the House Price Index from the Office of Federal Housing Enterprise Oversight (OFHEO), labor market statistics from the Bureau of Labor Statistics and the PMI affordability index, which uses local median household income, home price appreciation and the price of a conventional mortgage to calculate the local share of mortgage payment to income relative to its baseline year of 1995.

The PMI US Market Risk Index scale ranges from one to 1,000 and translates to a percentage. For example, a score of 100 indicates a 10% chance of a decline in home prices over the next two years. A higher score indicates a higher likelihood of future home price declines. The PMI Risk Index scale is linear. In other words, an increase in risk index score of 100% (for example, from 100 to 200) indicates that the risk of home price decline has doubled. Conversely, a decline in risk index score by 50% (from 100 to 50) indicates that the risk of home price decline has declined by 50%. The Affordability Index score is linear against a baseline of 100 in 1995. For example, an AI score of 85 means that the median home in that area is 15 percent less affordable than it was in 1995, or conversely that it takes 15 percent more of a family's monthly income to make the typical mortgage payment in that area.

A complete copy of the latest PMI Economic and Real Estate Trends report containing the latest Market Risk Index and analysis is available at pmigroup.com/newsroom/publications. An appendix that provides data for all US MSAs is also available.

About PMI Mortgage Insurance Co.

PMI Mortgage Insurance Co. is a leading U.S. residential mortgage insurer, licensed in all 50 states, the District of Columbia and Puerto Rico. Residential mortgage insurance protects lenders and investors against potential losses in the event of borrower default. Private mortgage insurance facilitates the sale of low down payment mortgages in the capital mortgage market and expands home ownership opportunities by enabling borrowers to buy homes with down payments of less than 20%. PMI is incorporated in Arizona and headquartered in Walnut Creek, CA.

Cautionary Statement: Statements in this press release that are not historical facts or that relate to future plans, events or performance are 'forward-looking' statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, PMI's Risk Index and any related discussion, and statements relating to future economic and housing market conditions. Forward-looking statements are subject to a number of risks and uncertainties including but not limited to, the following factors: changes in economic conditions, economic recession or slowdowns, adverse changes in consumer confidence, declining housing values, higher unemployment, deteriorating borrower credit, changes in interest rates or a combination of these factors. Other risk and uncertainties are discussed in the Company's filings with the Securities and Exchange Commission, including our report on Form 10-K for the year ended December 31, 2004.